Asean leaders meet under US-China trade war cloud

Asean leaders meet under US-China trade war cloud

US delegation downgrade signals revised role, Modi defends India's hard line on RCEP

Prime Minister Prayut Chan-o-cha delivers a speech during the opening ceremony of the Asean Business and Investment Summit 2019 (ABIS 2019) in Bangkok on Saturday. (Government House photo)
Prime Minister Prayut Chan-o-cha delivers a speech during the opening ceremony of the Asean Business and Investment Summit 2019 (ABIS 2019) in Bangkok on Saturday. (Government House photo)

Southeast Asian countries must stick together in the face of a trade war started by US President Donald Trump, Malaysian Prime Minister Mahathir Mohamad said on Saturday at the start of a regional summit held in the shadow of US-China tensions.

But as Asean leaders met in Bangkok on Saturday, there was no sign they had yet finalised a planned trade deal backed by China that could create the world’s biggest free trade area.

“Asean is quite a big market for the whole world. We don’t want to go into a trade war,” Dr Mahathir told a business summit on the sidelines of the main meeting. “But sometimes when they’re unnice to us, we have to be unnice to them.”

He described campaigns against exports of palm oil from Malaysia and Indonesia over concerns regarding labour and the environment as “sabotage”.

“If you cut back some imports of palm oil from Malaysia, we can cut back our imports from them,” he said.

“We should have one voice. If you go it alone, you will be bullied.”

In an obvious reference to Mr Trump, whose administration began raising tariffs on Chinese imports with the goal of reducing the US trade deficit, Mahathir said “If the person is not there, maybe there will be a change.”

A draft final statement for the Asean summit seen by Reuters said the leaders would express “deep concern over the rising trade tensions and on-going protectionist and anti-globalisation sentiments”.

Trade would be the main topic, diplomats said, with little discussion expected on perennial regional problems such as maritime disputes with China over the South China Sea and the plight of Rohingya refugees driven from Myanmar.

“We want global economic peace,” said Arin Jira, chairman of the Asean Business Advisory Council, a body set up by member states.

Export-reliant Asean countries are at the sharp end of the trade war, with growth expected to slow to its lowest in five years this year. They are also worried about increasing Chinese influence in a region whose population of more than 620 million is still less than half of China’s.

US presence downgraded

The United States, an important trade partner, is sending a delegation to the meetings. But the downgrading of its delegation compared to those in previous years and to those of other countries has concerned those who saw Washington as a security counterweight to Beijing.

Instead of President Donald Trump or Vice President Mike Pence, the US will be represented by Commerce Secretary Wilbur Ross and White House national security adviser Robert O’Brien. China is sending its premier, Li Keqiang.

“This signals that the US is a lesser player in our area,” Kantathi Suphamongkhon, former Thai foreign minister told Reuters.

Asean states had hoped to make progress toward finalising the Regional Comprehensive Economic Partnership (RCEP) — comprising 16 countries that account for a third of global gross domestic product and nearly half the world’s population.

But that was unclear after a scheduled news conference was cancelled late on Friday. A major sticking point has been demands from India, which is worried about a potential flood of Chinese imports. 

India is also said to be holding out for greater access across the region for its services sector. Prime Minister Narendra Modi defended his country’s approach, telling the Bangkok Post: “We have put forward reasonable proposals in a clear manner and are engaged in negotiations with sincerity.” 

“The finalisation of the RCEP negotiation has become a key test for Asean’s capacity to deliver on its often-cited centrality,” Marty Natalegawa, a former Indonesian foreign minister, told Reuters.

Human rights groups said they did not expect the Southeast Asian countries would do much to address problems such as the Rohingya refugees or discuss questions such as the growing authoritarianism in some member states.

“Asean will go far. Asean will endure,” was the jingle played repeatedly on the conference sound system. “Our neighbourhood becomes brotherhood,” it said.

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